Regulatory board investigates complaints against businessman

The alleged diversion or misappropriation of client funds is among a number of complaints being considered by a disciplinary tribunal investigating Wexford businessman and accountant Alan Hynes, it emerged today.

The Chartered Accountants' Regulatory Board (Carb) is investigating a number of complaints against Mr Hynes, a former director of Tuskar Asset Management (in liquidation), a property investment business into which investors put millions of euro.

It is alleged that he may be liable to disciplinary action for the breaching of the code of ethics of Chartered Accountants Ireland. This morning, on the second day of the hearing, Brian Farren BL, for Carb, said one of the complaints against Mr Hynes related to a co-ownership investment development in Dundrum, Dublin, called The Laurels, which was not a Tuskar Asset Management development.

While the phrase diversion or misappropriation of funds was deleted from some complaints forwarded to the disciplinary tribunal, this was not the case in the complaint dealing with the Dundrum issue, he said.

The tribunal heard that after investor Mr Darren McCourt asked Grant Thornton to look at the affairs of the Laurels deal in 2008, an investigation by the accountancy firm found that while the project was to have equity of €8 million invested, it could only find evidence of €6 million in investors’ funds actually being put into the project

The seven-level, 80-apartment development was to have been completed by the second quarter of 2008 and involved bank borrowings of more than €40 million. Inquiries by Aengus Burns of Grant Thornton concluded that investors had paid at least €7.5 million towards the project by transferring funds to Seamus Maguire & Co, solicitors, who were acting in the development. However his inquiries could only confirm €6 million in equity funds being actually put into the project.

Some of the investors, including Mr Hynes’ wife, Noreen, did not respond to requests for information concerning their investments, accounting for a sum of approximately €500,000 about which he could not come to definitive findings, Mr Burns said. This could account for the difference between the sum of €7.5 million which he had verified as being invested, and the €8 million that was to have been invested as per the co-ownership plan.

He said his examination of the books surrounding the development, which was eventually placed in receivership, raised questions about a “purported payment” of €484,000 recorded in accounts kept by Mr Hynes’ accountancy firm, Hynes & Co, as having been paid to Tuskar Property Holdings, an entity associated with Mr Hynes. However he wasn’t able to trace the payment being made in the bank accounts he examined.

The hearing was told that Grant Thornton was informed by Seamus Maguire & Co that some money invested in the Laurels project was used to pay stamp duty on a development in Maynooth, Co Kildare, and that this was done on the instructions of Mr Hynes.

The investors in the apartments, who numbered about 40, signed powers of attorney which were used when Bank of Scotland (Ireland) was being given guarantees for interest on the loans it was issuing. The hearing continues.